World Bank foresees faster development for BiH than other countries in the region. But, small and medium enterprises should be supported on the reform path.
Every year, based on the Global Framework of Fiscal Balance and Policies, we spend about 14 billion BAM. Significant part of spending goes to salaries and benefits of employees in public administration. Despite the government’s reform measures to preserve financial stability, new borrowings are unavoidable.
According to the report of World Bank for South Eastern Europe last year, BiH recorded the economic growth of 2.8 %. This was, as well as in the region, influenced by the increase of exports and investments. This year, the growth could reach 3 % assuming if the reforms are continued.
In the report of the World Bank extremely high unemployment rate in the region was considered as unacceptable. BiH with 27 % of unemployment is leading, most of those at employment bureaus are young. “We should work to reduce the unemployment rate. Everyone who works must be formally registered. It is important to work on integrating BiH in the regional, but also the space of the EU,” said Sandra Hlivnjak, an economist at the World Bank in BiH.
Estimates of economists are that economic growth is not possible without deficit reduction, major investment and reducing of the unemployment. “It would be the best for us if the growth rate of GDP is increased by 10 % of GDP, which corresponds to the economies of the developing world. However, it is obvious that we cannot expect such a fast GDP growth nor investment spending in the public or private sector,” explained Izudin Kesetovic, Professor at the Faculty of Economics in Tuzla.
In order for economic growth of BiH to be continued, the recommendations of the World Bank are improving productivity and structural reforms, elimination of barriers for formal employment, which is also a precondition for improving the business climate.
(Source: akta.ba)
